Can't really go by the color of the fluid. Fresh fluid has a bright red color, but will quickly darken during normal use. Sometimes will even look like used motor oil - almost black in color. Really should go by odor - if the fluid has a burnt smell to it, then it completely cooked and needs to be flushed out sooner than later.
As for flushes vs drains and refills - Toyota recommends just drains and refills as being sufficient. Change interval will be dependent on model year and mileage, what fluid is currently in there, and how the driving conditions were (lots of stop and go, excessive idling, towing - should change fluid more often).
Not changing the ATF is a sure fire way to kill a transaxle. That said, flushing a high mileage transaxle may cause it to die immediately afterwards, as it stirs up debris internally that clogs key oil passage ways - but in those cases, the transaxle would have died anyway from the lack of maintenance.
If you are unsure - stick with a drain and refill. It is a gradual process - as it only drains 1/3 to 1/4 of the total fluid capacity. If it was my car - I'd drop the transaxle pan and see how much debris is on the bottom of the pan, how much metal shavings are stuck on the pan magnets, and see how clogged the filter screen is. That should give you a clearer picture if the car has seen any previous transaxle service before.